World Bank – Watching and Waiting

Rapeseed field

I’ve been thinking about the World Bank call for more investment in solutions to combat climate change, and the effect it might have on encouraging nations and companies to choose new, sustainable investment targets.

The only thing that’s really new about this call is that this time it’s from the World Bank, an institution that hasn’t really won any awards in the past for choosing investment strategies that promote environmental and social sustainability. It’s good to see them on board – maybe it’s that times have gotten increasingly dire, maybe it’s that this is the first time the head of the World Bank is someone with actual scientific training. Still, it’s an uphill road.

Many years ago, I was giving a presentation to a large group of investors from major firms. My job was to provide insight into the infrastructure necessary for getting renewable energy crops from field to tank. Getting the fuel from the fuel factory to retail fuel stations (either by blending or directly) is a challenge in itself, but one people are used to thinking about. Getting the agricultural product from field to factory was, for many of these potential energy investors, a new process. If they hadn’t invested in agriculture before, they were in for a surprise.

At any rate, I laid out the various stations of going from seed to fuel – in this case, the crop was rapeseed – and showed the kind of supply lines, storage facilities, treatment mechanisms and so on to get the oil from the seed. Perhaps as important, I discussed a few junctures at which the supply side could go awry. Aside from weather difficulties, the harvested crop could suffer from poor storage and rot, the standard points of hazard when dealing with things that grow and decay.

At the end of the presentation, there was time for questions. At least two dozen hands went up. The presentation hadn’t been overly complicated, so I wondered what lay in store for me. I called on one man.

“You’re saying these risks are for this one crop. What about other crops? Surely that can’t be the case for all crops.”

“Well, when you invest in renewable energy from plant material, you are investing in agriculture. So anything that applies to agricultural investment on a fundamental level will apply here. Both risks and benefits.” He frowned, made a couple of notes, and nodded.

I asked for more questions – as it turned out, that question had been the same one everyone else wanted to ask, and they were all equally disappointed by my answer.

It’s certainly not the case that all investment into renewable crops and alternative energies is sustainable or environmentally sound – the palm oil plantations that have spread across vast land tracts that were once pristine jungle in Indonesia and Malaysia are easy examples. The big difference between investment in alternative energies vis-a-vis investment in existing energy technologies for coal, oil, gas, etc. isn’t that the existing technologies aren’t renewable (even if for the moment it doesn’t look like we’ll run out anytime soon), it’s that they generate more problems, both short and long term, than they solve. Not to mention the various costs of the occasional massive oil spill.

We know more oil will bring more money and employment and tax revenue and possibly, increased geo-political security.

We also know we don’t have the time, in global climate and environmental terms, to keep using oil and coal as energy resources.

So, go for it, World Bank. Show us what you can do, and show us how it’s done.